7 1 Introduction 1-1 Definitions Area Mail Processing Area mail processing (AMP) is the consolidation of all originating and/or destinating distribution operations from one or more Post Offices /facilities into other automated processing facilities for the purpose of improving operational efficiency and/or service Facilities The gaining facility obtains additional volume, workhours, and in many instances, mail processing equipment with the consolidation of operations from one or more sites. The gaining facility assumes responsibility and accountability for the distribution of mail from those operations that were processed by another facility. Most often, the gaining facility is a processing and distribution center having an array of mail processing equipment. The losing facility has volume, workhours, and mail processing equipment removed when selected operations are transferred to the gaining facility. Often, the losing facility is a Post Office that retains customer service operations or specific mail processing operations, such as delivery point sequencing. The naming convention for an AMP feasibility study or proposal is associated with the losing facility Postmarks A postmark is an official Postal Service imprint applied in black ink on the address side of a stamped mailpiece. A postmark indicates the location and date the Postal Service accepted custody of a mailpiece, and it cancels affixed postage. Since 1979, the Postal Service s Postal Operations Manual (POM) has provided standards for postmarks applied to single-piece First- Class Mail. Letters and flats that need to be postmarked come from carrier pick-up, collection boxes, retail counters, or lobby drop boxes. Postmarks are not required for mailings bearing a permit, meter, or precanceled stamp for postage, nor to pieces with an indicia applied by various postage evidencing systems. The postmarking process uses the following three basic methods of imprinting: 1. Automated: Advanced facer canceller systems used by processing distribution centers cancel letters quickly. These machines are March

8 1-2 Area Mail Processing Guidelines equipped with biohazard detection systems so letters postmarked by automation benefit from added safety measures. 2. Mechanized: A variety of older devices apply postmarks to flat-size mailpieces and to philatelic pieces. 3. Manual: Hand-stamp devices are used by Postal Service employees for local cancellation or philatelic requests. A local postmark shows the full name of the Post Office, a two-letter state abbreviation, ZIP Code, and date of mailing. Because the Postal Service is sensitive to the importance some customers place upon these postmarks, each Post Office is required to make a local postmark available. Lobby drops should be designated for this purpose with clear signage signifying its use. 1-2 Benefits of Consolidation 1-3 Evolution of AMP The Postal Service is able to keep pace with the needs of a changing nation by using a flexible network approach. These efforts support improvements in process consistency, equipment standardization, economies of scale, achievement of service objectives, and customer satisfaction. The benefits of AMP are as follows: 1. AMP centralizes mail processing operations to better use resources, including space, staffing, processing equipment, and transportation. 2. AMP takes advantage of state-of-the art technologies available at the gaining facility so originating and/or destinating mail can be processed more efficiently. 3. AMP supports network rationalization and reduces redundancies. 4. AMP should have minimal impact to customer services. Business mail entry, retail, and delivery services are expected to remain unchanged in most cases. Local mailers can expect indicia requirements for their postage meters or permit imprints to remain the same. Local postmarks will continue to be available at Post Offices. ZIP Codes will not change as a result of AMP. The advantages of consolidation were recognized decades ago by the Post Office Department. A variety of factors in the 1960s, including the advent of the ZIP Code system, the institution of sectional center facilities, and the nationwide deployment of mechanized equipment contributed to major changes in the procedures for processing and distributing mail. Increasing operational efficiencies and maintaining good customer service continue as important goals for today s Postal Service. AMP provides opportunities for the Postal Service to reduce costs and/or improve service and operate as a leaner, more efficient organization. Over the last three decades as mail processing evolved from manual and mechanized to automated processes, the AMP process evolved too. By 2 Handbook PO-408

9 Introduction , nearly 400 AMP centers handled mail throughout the nation. The first guidelines for AMP appeared in Handbook M-82, Developing Area Mail Processing Proposals (June 1979). Handbook M-82 was replaced in May 1984 with Handbook PO-408, Developing and Implementing Area Mail Processing. In April 1995, Handbook PO-408 was re-issued as Area Mail Processing Guidelines and updates to this handbook were released electronically in The process of initiating consolidations has evolved too. Initially, AMP was a local initiative that managers used to save money and to gain efficiencies by consolidating operations from a smaller facility into a larger facility. Advantages to this bottom-up approach include limited risk, expertise of local management about site-specific data, and ownership of consolidation. Recently, identification of consolidation opportunities expanded to include a top-down approach. This latter approach provides certain advantages including use of computer modeling, increased flexibility, and more consistent and standardized data analysis. Both AMP approaches focus on better use of Postal Service resources. 1-4 Overview of the AMP Process The major events that occur during the AMP process are summarized below in sequence and in Exhibit With the bottom-up approach, the process begins when the district manager or senior plant manager notifies the area vice president (AVP) about their intention to conduct an AMP feasibility study. The AVP informs Headquarters senior vice president (SVP) Operations. With the top-down approach, the SVP Operations contacts the AVP about initiating a feasibility study. 2. When either one of the approaches is used, communication to stakeholders must occur when there is a clear intent to proceed with an AMP feasibility study. The notification of intent to perform the study will include an invitation to the public to submit any comments or concerns to a Postal Service representative. 3. Within two months, the AMP feasibility study is completed, approved by the district manager (DM), and submitted to the AVP along with the required documentation. 4. Within 45 days after submission of the study, the DM must conduct a public input meeting. Fifteen days are provided for the public s submission of additional written comments after the meeting and for the district s summary of the meeting. 5. Also, after the DM s submission of the study, a 60-day review is conducted concurrently by the area and Headquarters management. Every AMP worksheet is verified and issues are resolved; after which, the study is provided to the AVP for consideration. March

11 Introduction Following receipt of public comments and finalized AMP worksheets, the AVP determines if the AMP proposal should advance to Headquarters. If the AMP is supported, the AVP must sign the Approval Signatures page and submit the AMP proposal to the SVP Operations. Generally, this step should be completed within two weeks. If the AMP is not supported, the AVP must submit an explanation to the SVP Operations. 7. The Vice President Consumer Advocate also receives a copy of the complete AMP proposal. A review by the Office of the Vice President Consumer Advocate ensures that adequate attention and resolution were given to the public input at the district and area levels prior to the consideration of the AMP by the SVP Operations. 8. The SVP Operations takes into account costs and benefits outlined in the AMP proposal along with summaries of public input when making the final decision to approve or disapprove the consolidation. A decision is expected within two weeks of receipt of the proposal. 9. Prior to the implementation of an approved AMP, national-level employee organizations must be notified and local employee organizations must be briefed in accordance with current employee agreements. 10. The area must conduct two post-implementation reviews (PIRs) to assess whether planned savings, workhours, and levels of service are met. The first PIR will cover the first and second full quarters after implementation, and the final PIR will cover the first full four quarters following implementation. 11. The AMP process is completed once the final PIR has been evaluated by Headquarters and feedback is provided to the area. March

13 2 Feasibility Study 2-1 Purpose 2-2 Exclusions An area mail processing (AMP) feasibility study determines whether there is a business case for relocating processing and distribution operations from one location to another. An AMP feasibility study must be conducted when a new facility project incorporates operations from two or more offices. An AMP feasibility study is completed within two months of the notification of intent to conduct the study. With input from management at both the losing and gaining facilities, the designated area AMP coordinator is responsible for preparing the AMP feasibility study and gathering supporting documentation. The objectives of an AMP feasibility study are identified as follows: 1. Evaluate service standard impacts for all classes of mail. 2. Consider issues important to local customers. 3. Identify impacts to Postal Service staffing, both craft and management positions. 4. Analyze savings and costs associated with moving mail processing operations. Not all transfers of mail require an AMP feasibility study. Mail processing shifts in volumes, workhours, or operations from one facility to another that do not fall under the AMP process include the following: 1. Aggregation of automation candidate mail (letters, flats, or parcels) for processing at a facility using automated equipment. 2. Centralization of mail processing activities over a weekend. However, area In-Plant Support must be notified prior to consolidations and Headquarters Processing Operations must be notified when implemented. 3. Consolidation of outgoing 2-day or 3-day volumes. March

14 2-3 Area Mail Processing Guidelines 2-3 Getting Started Initial Considerations Before undertaking an AMP feasibility study, consider the following: 1. The service impact that consolidation will have on the community as measured by service indicators, such as (but not limited to) Customer Satisfaction Measurement, External First-Class (EXFC), and other service performance reports. 2. Service standard changes, including upgrades or downgrades for First- Class Mail, Priority Mail, and other mail classes. 3. Impacts on customer services, such as collection box pick-up times, location and hours for acceptance by the business mail entry unit (BMEU), retail availability, and drop shipment changes. 4. Impacts to the operating plan at the gaining and losing facilities associated with the 24-hour clock indicators. 5. Future equipment deployment. 6. Likelihood of potential savings and efficiencies First Steps The area office will appoint an area AMP coordinator to act as the liaison between Headquarters, the district, and gaining and losing facilities. This person is responsible for providing assistance and guidance during the development of an AMP feasibility study. The area AMP coordinator establishes an area functional review team to assist during the entire AMP process and provides validation of data contained in the feasibility study. The AMP coordinator is the primary contact for Headquarters and resolves issues associated with an AMP proposal. The area AMP coordinator contacts the manager Network Alignment Implementation (NAI) and requests data on all service standard impacts. The request must include information for addresses, finance numbers, type of distribution to consolidate, and ZIP Code pairs for facilities under consideration. The service standard impacts are returned to the area AMP coordinator within 15 days. Based on the outcome of initial considerations, the area determines whether to proceed with an AMP feasibility study AMP Coordination State, district, and area boundaries must be disregarded when it is advantageous in the development of a sound AMP plan. Any proposal involving Post Offices/facilities located in adjacent areas or districts must be coordinated with the appropriate AVP. Inter-area transportation changes must be reviewed and approved by Headquarters Network Operations. 8 Handbook PO-408

15 Feasibility Study Notification of Intent 2-5 Completing Worksheets After a preliminary determination is made that service and/or efficiency may be effectively improved with the consolidation of mail processing operations, the district manager and/or the senior plant manager from the gaining facility sends a letter to the AVP stating the intent to conduct an AMP feasibility study. The AVP must inform Headquarters SVP Operations that an AMP feasibility study is to be prepared. The date of this letter represents the starting date for the AMP feasibility study. The business case for consolidation of operations is compiled from information entered into various electronic worksheets. Use of electronic worksheets significantly improves the consistency and accuracy of AMP information. Formulas automatically calculate data in specific cells and populate information in other cells. The electronic worksheets are linked to recognized data sources, such as the enterprise data warehouse (EDW) and web complement information system (webcoins). In special circumstances, such as two or more facilities consolidating into one gaining facility or operations from one facility are transferred to two or more gaining facilities, the area AMP coordinator should contact the manager NAI for specific guidance. 2-6 Supporting Documentation All supporting documentation must be kept on file at the area office for at least three years after the HQ approval of the final post-implementation review or after the last step taken in the AMP process, if the AMP is not approved. Examples of documentation include the following: 1. Operating plans for the gaining facility. 2. Reports used to determine mail volumes and workhours. 3. Analyses of service, staffing, and transportation impacts. 4. Copies of communications to stakeholders identified in the AMP worksheet, Stakeholders Notification. 5. Any other related reports or data used to develop the worksheets. 6. Impact statement for complement adjustments at the losing facility. 7. AMP worksheet checklist. These documents are also used as reference during the post-implementation reviews. March

16 2-7 Area Mail Processing Guidelines 2-7 Public Disclosure Both draft and final AMP worksheets can contain commercially sensitive information, the public disclosure of which could cause competitive harm to the Postal Service. This information includes operations, volume and service performance data, or other information from which such data may be derived. Accordingly, neither draft nor final copies of AMP worksheets should be publicly disclosed before those worksheets have been reviewed and sensitive data redacted from copies intended for disclosure in accordance with guidance from the Headquarters manager NAI. 2-8 Canceling a Feasibility Study If for any reason the AMP feasibility study is canceled within the two-month study period, the AVP must send a letter to the Headquarters SVP Operations stating the reasons why the feasibility study could not be continued at that time. Communications about a change in the status of a feasibility study must be provided to those identified on the Stakeholders Notification worksheet. 10 Handbook PO-408

17 3 Area Mail Processing Proposal 3-1 Definition 3-2 Summary Narrative An area mail processing (AMP) proposal is a feasibility study that has been validated by the area and Headquarters, supported by the area vice president (AVP), and submitted to the senior vice president (SVP) Operations for a decision on the consolidation. An AMP proposal consists of a summary narrative, finalized worksheets, a geographical map of the area, and a summary of the public meeting and comments. The AMP proposal requires approvals from designated local, district, and area management. The summary narrative highlights savings and costs associated with the consolidation along with other impacts. The narrative should include, but is not limited to, the following elements: 1. The header section contains the following information: a. City, state, and facility type, such as Post Office or processing and distribution center. b. Three-digit ZIP Codes served by the gaining and losing facilities. c. Type of distribution proposed for consolidation. 2. The background information should contain the following: a. Distance in miles between gaining and losing facilities. b. Average daily volume of mail to be shifted. c. Reason(s) for consolidating the mail into another office. d. Changes that affect the operating plan(s) at either the gaining or losing facilities, explained in terms of the 24-hour clock indicators. 3. Financial summary with expected first-year savings. 4. Customer and service impacts as follows: a. Explanation of service standard changes. b. Summary of customer service changes. c. Analysis of present service performance, such as External First- Class (EXFC), based on the most current quarter s data. 5. Staffing impacts. March

18 3-3 Area Mail Processing Guidelines 6. Equipment relocation and maintenance impacts. 7. Transportation changes. 8. Other significant cost-saving programs occurring during the AMP process but not associated with consolidation must be noted. Identify any initiative expected to have a financial impact to the losing or gaining facility. 3-3 Geographical Description In addition to the narrative and required worksheets, an 8½-inch by 11-inch colored map of the area where the consolidation will occur is required. The map must highlight landmarks pertinent to the proposal including each impacted facility, major highways, and the boundaries of all three-digit ZIP Code areas affected. 3-4 Protocol for an AMP Proposal District Responsibilties Local and district responsibilities include the following: 1. Management must review all worksheets and indicate approval with signature on the Approval Signatures worksheet. 2. Management must retain copies of all worksheets completed at the local level and any supporting documentation for at least three years after the HQ approval of the final post-implementation review (PIR) or after the last step taken in the AMP process, if the AMP is not approved. 3. The district manager has overall responsibility for the public input meeting, which occurs within 45 days after submission of a feasibility study to the area vice president (AVP) Area Responsibilities Area responsibilities include the following: 1. The area AMP coordinator, in conjunction with the area functional review team, has up to 60 days to validate worksheets from the AMP feasibility study and finalize the business case that will be sent to the AVP. The area AMP coordinator must ensure all supporting documentation provided by the local facilities is retained for three years after the HQ approval of the final PIR or after the last step taken in the AMP process, if the AMP is not approved. 2. The AVP evaluates the business case along with public comments, then: a. Concurs with the proposal, signs the Approval Signatures worksheet, mails a copy of the original document to the SVP 12 Handbook PO-408

19 Area Mail Processing Proposal Operations, and sends an electronic copy to manager Network Alignment Implementation (NAI), or b. Does not concur with the proposal, returns the study to the district manager of the gaining facility, and mails a copy to the SVP Operations along with an explanation for this decision Headquarters Responsibilities Headquarters responsibilities include the following: 1. Within 60 days of receipt of the feasibility study, the manager NAI will complete a review with other Headquarters functional organizations. If substantive changes are made to the AMP study during this review, a copy of the study will be returned to the area AMP coordinator who will obtain concurrences on a new Approval Signatures worksheet. 2. A review by the Office of the Vice President Consumer Advocate ensures that adequate attention and resolution was given to the public input at the district and area levels prior to the consideration of the AMP by the SVP Operations. 3. The SVP Operations makes the final decision for the consolidation of mail processing operations. Notice of the final decision will be sent to the AVP, along with an explanation if the AMP is disapproved. 4. For approved AMP proposals, the manager NAI maintains oversight through the post-implementation reviews. March

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